US stocks slide as trade anxiety and tech nerves spook Wall Street

2 minutes read

16 April 2025

US stocks slide as trade anxiety and tech nerves spook Wall Street

The US market had a breather on Tuesday, with all three major indices closing in the negative. Investors were confronted with a mix of trade concerns, new export restrictions on tech titans, and a defensive world mood. Here's a closer examination of what drove the markets and what it may hold in the days to come.

Trade tensions back in the limelight

Trade news again dominated the headlines. The White House announced fresh investigations into tariffs on essential minerals, indicating that the US is willing to play hardball with China. President Trump's government made it unmistakably clear: "China needs to make a deal, not the US." This hard-nosed rhetoric shook investors, who have become nervous about any escalation that can throw global supply chains into chaos.

The effect was instantaneous. The Dow Jones Industrial Average fell 155.83 points, or 0.38%, to close at 40,368.96. The S&P 500 fell 0.17% to 5,396.63, while the Nasdaq Composite fell 0.05% to 16,823.17. The atmosphere was subdued, with traders monitoring each headline for indicators of advancement—or setbacks.

Mohamed El-Erian, chief economic advisor for Allianz, captured the mood: "While we can appreciate the calm, we should not grow accustomed to it, as I anticipate volatility is on the horizon."

Tech sector faces new export curbs

Tech stocks, which have driven much of the market's advance this year, also had their headwinds. Nvidia announced that the US government placed new restrictions on its exports to China. The action, taken to safeguard national security, also heightened concerns about the sector's growth prospects.

Nvidia stocks rose 1.30%, but the rest of the tech sector took a hit. The Nasdaq's small decline covered up more serious concerns about how export controls would impact future profits. Other tech stocks, such as Intel, fell as investors readjusted their expectations.

Netflix defied the trend, rising 4.85% after a robust earnings report. But overall, the mood was cautious. As one Wall Street strategist said: "Technology remains the driver of this business, but any hint of regulatory or trade difficulty can quickly deflate the sails."

Global cues and sector shake-ups'

The US wasn't alone in sensing the heat. China's Q1 GDP surprised on the upside, however, Asian indices started lower, and US futures traded 100–200 point losses overnight. Investors took flight, sending gold to an all-time high and the US dollar index under 100.

Sector performance was uneven. Utilities and tech eked out small gains, while communication services, consumer discretionary, and energy trailed. On the S&P 500, just one stock reached a 52-week high—a testament to how gun-shy investors have become.

The CBOE Volatility Index (VIX) retreated to 30.12, but specialists warn that tranquility may be short-lived. With US retail sales figures and a deluge of Q1 profits in the pipeline, the next couple of days might determine the pace for the remainder of the quarter. A line graph showing the VIX Volatility Index from April 9 to April 16, 2025, highlighting a peak on April 12 and a subsequent decline, with VIX values fluctuating between 38 and 45.

As El-Erian commented, "Markets are walking a tightrope. The balance between optimism and caution has rarely been more delicate”.

For now, Wall Street is keeping its guard up, watching for the next headline that could tip the scales.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Winvesta. We advise investors to check with certified experts before making any investment decisions.